Bitcoin Miners Must Plan for Halving to Avoid Bankruptcy, Says Fidelity Digital Assets

According to CoinDesk, Bitcoin (BTC) miners need to maintain their existing hashrate, energy, and real estate while competing with the rest of the network to avoid going bankrupt, as stated in a report by Fidelity Digital Assets. The quadrennial reward halving, which cuts miners' bitcoin earnings by 50%, is an event that miners must constantly plan for. Analyst Daniel Gray explained that miners need to be proactive and cannot afford to just maintain their position in the network. They must constantly push to acquire more hashrate, increase the efficiency of their hashrate, acquire lower-cost energy from cheaper sources, and expand their infrastructure to house any new machines. Fidelity notes that the months after halving are the most difficult, as miners need capital reserves to offset the drop in revenue while bitcoin plays catch-up to the immediate pay cut. However, as the protocol evolves, new layers could emerge, bringing new use cases and more users. The report added that while past halvings did see a flush-out of weaker miners, the industry ultimately recovered with more miners and hashrate than ever, demonstrating the resiliency of the network and industry.